Amazon has lifted its ban on third-party sellers using FedEx ground delivery services, effective January 14, 2020. The e-commerce company had temporarily suspended access to FedEx’s ground and home services in December 2019, citing poor performance during the holiday season. FedEx was allowed to resume services after meeting Amazon’s delivery requirements, according to the company.
FedEx reinstated after holiday ban
Amazon temporarily blocked third-party sellers from using FedEx’s ground delivery network on December 16, 2019. The move came during the peak holiday shopping period. Amazon said the ban was due to FedEx’s failure to meet its delivery performance standards. The suspension applied only to FedEx Ground and FedEx Home services. Sellers could still use FedEx Express for faster shipping.
“This is good news for our mutual customers who have come to rely on the FedEx Ground offering,” an Amazon spokesperson said. The company did not provide specific details on how FedEx had improved its performance. But the reinstatement suggests FedEx addressed Amazon’s concerns.
FedEx shares rise after announcement
Following Amazon’s announcement, FedEx shares rose as much as 3% on January 14, 2020. Investors viewed the reinstatement as a positive sign for the logistics company. FedEx had lost a significant source of revenue when Amazon imposed the ban. The stock recovery reflected market optimism about the renewed partnership.
“We look forward to working with Seller Fulfilled Prime merchants and providing outstanding service,” the FedEx spokesperson added. The company emphasized its commitment to serving Amazon’s third-party sellers. FedEx had previously announced plans to end its contract with Amazon for express delivery services in August 2019. The ground delivery ban added to the tension between the two companies.
Tensions between Amazon and FedEx predate the ban
The relationship between Amazon and FedEx had been strained for months before the December ban. In August 2019, FedEx announced it would not renew its contract with Amazon for express delivery services. FedEx said it was shifting its focus to the broader e-commerce market. The company viewed Amazon as a competitor rather than a partner.
Amazon responded by building its own delivery network. The company launched Amazon Shipping in 2018, offering delivery services to third-party sellers. Amazon also expanded its fleet of delivery vans and aircraft. The company now handles a growing share of its own deliveries. This move threatened FedEx and other logistics companies like UPS.
The December ban on FedEx ground services was seen as another step in Amazon’s strategy to reduce reliance on external carriers. Amazon said the ban was based solely on performance issues. But industry analysts noted the timing coincided with Amazon’s push to grow its own delivery capabilities.
Impact on third-party sellers
Third-party sellers on Amazon’s platform were caught in the middle of the dispute. Many sellers relied on FedEx ground services for affordable shipping. The ban forced them to find alternative carriers during the holiday season. Some sellers reported delays and higher shipping costs.
With the reinstatement, sellers can again use FedEx ground services for orders fulfilled through Amazon’s Seller Fulfilled Prime program. This program allows sellers to ship products directly to customers while meeting Amazon’s delivery standards. The reinstatement gives sellers more options and may help reduce shipping costs.
Amazon’s decision to lift the ban also signals a temporary truce in the logistics war between the two companies. Both sides have incentives to cooperate. Amazon needs reliable delivery partners for its massive e-commerce volume. FedEx needs access to Amazon’s vast seller network.
The reinstatement of FedEx ground services at Amazon marks a step back from the brink of a complete break between the two companies. While tensions remain high and both continue to build competing logistics networks, the immediate need for reliable delivery during peak periods has brought them back together. For third-party sellers and customers, the return of FedEx ground services means more shipping options and potentially faster deliveries. The long-term relationship between Amazon and FedEx remains uncertain, but for now, the ground delivery ban is history.
